Equity Residential is flattening out after a long ascent, and
one investor is looking for it to move sideways.
optionMONSTER's tracking systems detected the sale of 5,000 August
60 calls for $1.35 and 5,000 August 60 puts for $3. There was no
open interest in either contract before the activity occurred.
The transaction generated a credit of $4.35, which the trader will
keep if EQR closes at $60 on expiration. Gains will erode on either
side of that level, and turn to losses below $55.65 and above
The real-estate investment trust is up 0.1 percent to $58.52 in
afternoon trading. It climbed about 40 percent between April 2010
and April 2011, but gains have been slowing since then as shares
push against their all-time high around $61 from late 2006.
Stocks often pause at such levels, creating opportunities for
market-neutral strategies that make money from the passage of time
rather than a directional move. Today's trade, known as a short
straddle, is one of the most popular. (See our Education section)
Overall option volume in EQR is 9 times greater than average so far
in the session.
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